Our right to know if big firms pay their fair share - Daily Telegraph

Posted by Andrew Leigh Mp48sc on June 19, 2015

Our right to know if big firms pay their fair share, Daily Telegraph, 19 June

Here’s a question for you: who pays for your nearest hospital? Whose money fixed the road you use to get to work? Who shells out for the books and computers that keep kids learning at the local school?

You do, of course. We all contribute to funding these things through the tax that comes out of our fortnightly pay. Recently though, it has become clear that some of us are contributing more than others.

Someone earning the average Australian income pays about 21 per cent in tax; a small business pays the corporate rate of 30 per cent on their profits. But in the past few years there have been increasingly regular reports about huge companies paying just a fraction of that.

For instance, in a recent Senate inquiry we heard evidence that one big multinational firm may have paid as little as 2 per cent tax on billions of dollars in revenue. If the average Australian wage earner paid tax at that rate instead of their standard 21 per cent, they’d be paying almost $15,000 less a year.

As much as we all might like to pay a bit less, we also know that contributing to the tax system is what keeps our essential services going. That’s why it’s so important everyone pays their fair share – individuals, small businesses and big ones alike.

One of the best ways to make sure big companies are doing the right thing is by increasing public scrutiny over how much tax they pay. That’s why, when Labor was last in government, we introduced laws that would see the Australian Tax Office publish information about the income and tax paid by companies earning over $100 million a year. The tax office is supposed to start releasing that data in just a few weeks’ time.

There’s only around 2,000 companies in Australia that earn enough to trigger this reporting. And right now the Abbott Government is trying to exclude over 800 of them from the transparency rules so that they can continue keeping their tax affairs a secret.

One of the government’s junior ministers says he is worried about unleashing ‘the politics of envy’ if Australians have access to this basic information about big companies. What he actually means is that Australians might be envious of how little tax some of these firms really pay.

When reports surface about questionable tax practices in the big end of town, the Government is always quick to criticise these as inaccurate or misinformed. But they voted against tax transparency while they were in opposition. Now they have the opportunity to put the real figures into the public domain, and they’re hard at work rolling back the laws that would make that happen.

It seems pretty clear that the Abbott Government’s doesn’t care about ensuring everyone contributes fairly to Australia’s common wealth. Their real priority is to keep big companies out of the spotlight and so keep Australians in the dark about the unfairness in our tax system.

Perhaps that is also why the government has overseen the sacking of over 1100 compliance staff from the Australian Tax Office in the past year alone, including 270 from the specific section that investigates private companies.

Tony Abbott’s ministers shouldn’t be putting the interests of a few huge companies ahead of the Australian community. Australians are rightly concerned that some big firms aren’t paying their fair share, and want to see their government put a stop to that – not help it happen.

Tax transparency is a pro-business measure. How can an Aussie small business hope to compete with a multinational whose tax rate is less than a tenth of theirs?

My party stands by our transparency laws because we believe they can help hold companies accountable for the contribution (or lack thereof) they make to our community. Any responsible government would care far more about this than about protecting companies from criticism or ‘envy’.

I don’t believe the Abbott Government wants to be known as the party which stands for stands up for the mega-rich against regular Australians. But if they decide to go ahead with gutting the tax transparency laws, it’ll be pretty clear whose side they’re on.